Jumbo Mortgage Loans Are Back on the Table

Jumbo mortgage loans, which sizzled during the housing market’s run-up and then fizzled spectacularly, are back with more flexible products from more lenders and interest rates that are inching ever closer to the terms offered to buyers of much less luxurious homes.

As a result, more consumers are able to consider the purchase of luxury homes, a market that has been long stalled. Nationally, the annual dollar volume of jumbo loans is on pace to be the best since 2007, and a growing field of lenders is seeking to build a customer base or cement established relationships by offering those mortgages.

“For a long time, it was, ‘Oh, God, wait and see what happens with the mortgage,’ ” says Matt Farrell, managing partner a Chicago real estate company. “The banks have a renewed confidence in the collateral.”

During the housing industry’s darkest days when private investor interest in mortgages was nil, the overwhelming majority of mortgages written were either Federal Housing Administration-backed loans or mortgages that met Fannie Mae or Freddie Mac standards and were then sold to either agency. The loan limit for those loans in most parts of the country is $417,000.

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